Well the free game looks nothing like the youtube video on my system, but I guess if you have a really bad quality monitor/video card with no support for low resolutions or you use a program like D3DWindower to artificialy stretch the screen it can look ugly and unplayable.
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Click on videos of other games the guys done they look fine so his video capture is okay
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That makes no difference since a setting that works on video capture for one game does not mean it works for all games.